Treasury Secretary Scott Bessent's strategy to manage the bond market may receive a boost from the Trump administration's crypto legislation push. Last week, the Treasury announced larger buybacks of longer-term bonds, potentially funded by increased issuance of shorter-term Treasury bills—a move Bessent called a "Treasury twist" on CNBC. A key potential source of demand for these bills is stablecoins.

Under the Genius Act, stablecoins issued in the U.S. pegged to the dollar must back reserves with assets including Treasurys maturing within 93 days. With a current market value around $300 billion, stablecoins are small compared to $8 trillion in U.S. money-market funds, but Bessent has cited projections they could reach nearly $4 trillion, potentially lowering government borrowing costs. President Donald Trump recently hosted crypto executives at the White House to urge passage of the Clarity Act, while the SEC proposed a new crypto regulatory framework.

In anticipation, shares of Circle Internet Group and Coinbase Global rallied over 20%. A Brookings Institution review notes stablecoins typically back $1 with 80 cents of T-bills, versus banks holding only 8 cents. In a Citigroup "base case" scenario reaching $4 trillion by 2030, stablecoins could hold around a quarter of outstanding T-bills.

However, the market has plateaued recently, per data provider CoinGecko.